A settlement hearing in the matter of Portfolio Strategies Corporation was held on January 18, 2013 in Alberta before a hearing panel of the MFDA’s Prairie Regional Council.

The panel accepted the settlement agreement between MFDA Staff and Portfolio Strategies, as a consequence of which the company:

  • has paid a fine of $35,000;
  • has paid costs of $5,000; and
  • shall comply with all MFDA By-laws, Rules and Policies, and all applicable securities legislation and regulations made thereunder, including MFDA Rules 2.2.1, 2.5, and 2.10, and MFDA Policy No. 2.

In the agreement, the company admitted that between December 1, 2006 and April 2009:

  • Its head office compliance staff failed to adequately supervise some trades, contrary to MFDA Rules 2.2.1, 2.5 and MFDA Policy No. 2; and
  • It failed to establish adequate policies and procedures to supervise leveraging recommendations, and also failed to maintain, in respect of some leveraged trades, adequate records of trade supervision, including records of trades reviewed, inquiries made, responses received and resolutions achieved, contrary to MFDA Rules 2.2.1, 2.5, 2.10 and MFDA Policy No. 2.

The panel advised it will issue written reasons for its decision in due course. Read the settlement agreement.